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(70)
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Chapter

BADM*2020 Chapter Notes -Finished Good, Equipment Rental


Department
Business
Course Code
BADM*2020
Professor
Foard

Page:
of 2
Cost Flows – Chapter 2
Given:
Beginning Raw Material Inventory............................................$10,000
Purchases of Raw Material.........................................................200,000
Ending Raw Material Inventory...................................................30,000
Direct Labour............................................................................. 270,000
Indirect Materials........................................................................... 5,000
Indirect Labour...........................................................................100,000
Utilities, Factory...........................................................................80,000
Utilities, Office.............................................................................60,000
Property Taxes, Factory................................................................36,000
Property Taxes, Office..................................................................40,000
Insurance, Factory.......................................................................... 9,000
Insurance, Office............................................................................ 5,000
Equipment Rental.........................................................................70,000
Depreciation, Factory.................................................................120,000
Depreciation, Office..................................................................... 70,000
Beginning Work In Process Inventory......................................... 40,000
Ending Work In Process Inventory...............................................60,000
Beginning Finished Goods Inventory........................................ 130,000
Ending Finished Goods Inventory................................................80,000
Required:
Calculate the Cost of Goods Sold
GH Inc.
Schedule of Cost of Goods Manufactured
Direct Materials:
Beginning raw materials inventory...................................$10,000
Add: Purchases of raw materials...................................... 200,000
Raw materials available for use........................................210,000
Deduct: Ending raw materials inventory............................ 30,000
Raw materials used in production.................................................. $180,000
Direct Labour.......................................................................................... 270,000
Manufacturing overhead
Indirect materials.................................................................. 5,000
Indirect labour...................................................................100,000
Utilities, factory.................................................................. 80,000
Property taxes, factory........................................................ 36,000
Insurance, factory..................................................................9,000
Equipment rental.................................................................70,000
Depreciation, factory........................................................ 120,000
Total overhead costs..................................................................... 420,000
Total manufacturing costs......................................................... 870,000
Add: Beginning work in process inventory............................................. 40,000
910,000
Deduct: Ending work in process inventory............................................. 60,000
Cost of goods manufactured.................................................................... $850,000
Cost of Goods Sold
Beginning finished goods inventory.............................................. $130,000
Add: Cost of goods manufactured................................................. 850,000
Goods available for sale................................................................. 980,000
Deduct: Ending finished goods inventory..................................... 80,000
Cost of goods sold.......................................................................... $900,000